PSEi slightly up in moderate trading

The Philippine Stock Exchange index slightly rose in moderate trading Monday, buoyed by short-term prospects of low inflation and low interest rates. The PSEi advanced 22.40 points or 0.67 percent to close at 3,357.88. Over 1.81 billion shares worth P3.43 billion changed hands. Gainers led losers 77 to 40, while 64 issues closed unchanged. The outlook for both inflation and interest rates remain stable with the Bangko Sentral ng Pilipinas saying that consumer prices would likely stay within the government forecast of 4.7 percent for the year, Jonathan Ravelas, research head of BDO Universal Bank told GMANews.TV. The central bank’s key policy rates of 4 percent for overnight borrowing and 6 percent for overnight lending are also expected to remain in place until the third quarter, Ravelas said. The impact of China’s currency announcement - that the yuan would no longer be pegged against the US dollar - that fuelled other Asian markets Monday - also helped lift sentiment among investors in the Philippines, he said. The situation in the Philippine market is that investors would like be penalized through low interest yield by keeping their money in banks, considering that the PSEi has gained 9.91 percent in the year-to-date, Ravelas explained. He said the only concern now is the thin volumes, which show that investors are lightening positions as the market moves higher. This could be a reflection of lingering concerns about the European debt crisis and the concerns with how President-elect Benigno Aquino III would tackle the country’s problem and the Cabinet he would form to run government, Ravelas added. —VS, GMANews.TV